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Textron Inc. (TXT), with a market cap of $16.8 billion, is a diversified industrial conglomerate operating across the aerospace, defense, and finance sectors. The Providence, Rhode Island-based company is a key player in manufacturing aircraft, helicopters, and specialized industrial products, while also offering financial services tailored to its core markets.
Shares of this defense contractor have underperformed the broader market over the past 52 weeks. TXT has rallied 17.3% over this time frame, while the broader S&P 500 Index ($SPX) has surged 27.8%. Meanwhile, in 2024, TXT stock gained 10.2%, compared to SPX’s 17.8% rise on a YTD basis.
Zooming in further, Textron has also lagged behind the S&P Aerospace & Defense SPDR’s (XAR) around 27% gain over the past 52 weeks and a 12.3% return on a YTD basis.
TXT has underperformed over the past year due to volatility in aircraft delivery timing and concerns about moderating growth in demand for business jets. On Jul. 18, Textron's shares recovered marginally after reporting its Q2 profit beat driven by strong demand for its business jets and military helicopters. However, the following day, the stock dipped 2.5% due to lingering concerns about industry-wide supply chain issues impacting aircraft deliveries, which remained below the previous year's figures, and total revenue slightly missing expectations.
For the current fiscal year, ending in December, analysts expect TXT's EPS to grow 12.2% year over year to $6.27. The company's earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on one another occasion.
Among the 12 analysts covering the stock, the consensus rating is a “Moderate Buy.” That is based on seven “Strong Buy” ratings, four “Holds,” and one “Strong Sell.”
This configuration is slightly less bullish than three months ago, with eight “Strong Buy” ratings on the stock.
On Aug. 8, Morgan Stanley (MS) downgraded Textron to “Equal Weight” with a price target of $95, citing limited near-term catalysts and concerns about demand for business jets amid potential economic growth moderation.
The mean price target of $103.25 represents a premium of 16.5% to TXT’s current levels. The street-high price target of $120 implies a notable potential upside of 35.4% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
